The most common mistakes borrowers

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Nowadays, more and more people are deciding to borrow online without any certification . The loan companies’ offers are extremely attractive and are better suited to the needs of a potential client. Borrowers themselves, however, make many mistakes when applying for a loan, which usually results from haste and carelessness. Discover the most common of them and learn how to avoid them!

Too many applications

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Theoretically, we can submit as many applications as we want, but practically if there are too many of them, it will work to our disadvantage and ultimately may contribute to the fact that we will not receive a loan. This is due to the fact that both banks and loan companies (including Nora Helmer ) verify their clients in debtors’ databases. It is optimal to prepare 2-3 applications and wait for the loan decision.

What is important, however, in databases such as BIG or BIK we will find information not only about possible debt, but about all customer activities, including whether (and how many companies) he has applied for a loan. The lender, seeing that we have filed these applications too much, may refuse to grant us a loan for fear of being redirected.

Lack of knowledge about the offer

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An error often made by borrowers is the lack of thorough familiarization with the offer. A significant proportion of people who need cash quickly only consider the information that is contained in the ad. This, however, first of all indicates the attractiveness of the offer itself and how quickly you can get a loan, because it is inevitable that it is able (even because of the short duration) to accurately present e.g. the total cost of incurring such a commitment.

Lack of knowledge about the lender

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There are many companies on the market of non-bank services that offer loans tempt us with low interest rates, attractive conditions and minimal formalities. Before we decide to take advantage of a given offer, let’s also check the credibility of the lender. The easiest way to do this is to look for information about it on the web. The Association of Loan Companies is one of the most reliable sources of knowledge about non-bank entities. If a given company appears in it, it means that we can trust it fully.

Take the wrong amount

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It is risky here to take too little (that will not satisfy our needs) and too much (in which case we may have problems with repayment).

Applying for a loan in installments is a good solution to our financial problems if and only if we know that we can repay it on time.

In choosing the right amount for our needs, on the one hand, we will be able to clearly specify the purpose (i.e. knowledge about what we want to borrow money for) and matching the amount we apply for to our financial capabilities, earnings and condition of the home budget. This will not only minimize the risk of possible repayment problems, but will also prevent you from borrowing more than we need and spending money that we don’t have.

Reading the contract and other documents

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Most clients applying for a loan do not read contracts at all, which can later cause many problems. Therefore, you should carefully read what is contained in such a document (especially what has been written in small print) and carefully check the terms of the contract. The more that the contract contains the most important information for us about the cost of the loan, interest rate, repayment dates, etc.

Also remember that your signature on the aforementioned documents is tantamount to consent to the provisions contained therein.

No credit history

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Interestingly, not only a negative credit history, but also the lack of it may act to our disadvantage as potential borrowers. This note applies especially to loans for larger sums. If we don’t have a credit history and we didn’t incur any obligations before, then the bank or loan company doesn’t know if they can trust us. To start building a credit history, it is worth taking out a small loan beforehand or buying something in installments, and then repay the commitment in a timely manner.